THE Windhoek municipality plans to use public-private partnership to construct its 25 MW plant, the council announced in an advert last week.
Not only does the city council plan to use the public-private partnership (PPP) laws and provisions that are currently underutilised, the city will also take advantage of the provisions of the modified single buyer (MSB) rules.
MSB is a new market structure the government adopted in April 2019, which became operational end of 2019. However, the guiding market rules are not yet gazetted. The 2019 MSB rules would enable big electricity consumers to procure 30% of their electricity needs from independent power producers (IPP) or generate the power themselves.
In the advert, the city seeks a qualified and self-financing partner to construct, commission and maintain an inclusive integrated 25MW solar power station for Windhoek using the build, own and operate (BOO) approach.
The partner will not only develop but also own and operate the station on behalf of the city for 25 years after which the partner will transfer ownership back to the city.
Through a request for information tender, the city last week made documents available for interested IPPs to bid and show their intention to the council. The documents cost bidders N$1 000, non-refundable.
IPPs have until 19 August to prepare their information to entice the city into partnering with them in energy production.
The total amount of contestable energy available on the MSB market for bilateral transactions is currently set at 30% of total national energy demand in the first phase of the MSB market. So, contestable customers can now buy 30% of their electricity needs from other energy sources other than NamPower or generate the energy themselves.
Under the MSB, a transaction to trade electricity is negotiated and entered into between a willing buyer and a willing seller under mutually acceptable terms, including price and quantity, for a specified period.
The MSB market includes generators owned by a contestable customer and/or generators behind a customer's meter.
Cognisant of the country's energy insecurity and the cost of energy, the government has demonopolised NamPower's energy generation mandate, making it commercially viable for IPPs to generate and sell electricity at competitive tariffs.
Local authorities and companies (economic agents) now have a diversified power supply mix, enabling them to adopt cheaper renewable energy.
The liberalisation of the energy generation sector has also brought in a funding need and provided an investment platform for unlisted asset managers, who are sitting on committed funds.
Most IPPs are unlisted, with only a few registered on the Namibian Stock Exchange.
The partner City of Windhoek seeks would fund the design, construction and operation costs under BOO.
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